While microprudential oversight focuses on individual banks, Macroprudential Supervision analyzes the financial system as a whole. This discipline monitors systemic risks, addresses portfolio correlations, and manages the vulnerabilities of Global Systemically Important Banks (G-SIBs).
Identifying Systemically Important Institutions
Regulators identify G-SIBs using a multi-variable scoring model that looks past simple asset sizes:
  Systemic Assessment Vector |   Operational Metric Tracked  |   Macroprudential Risk Focus
-----------------------------+-------------------------------+-----------------------------------------
  Size Metrics               | Total enterprise leverage asset exposures | Total systemic footprint scale
  Interconnectedness Logs    | Intra-financial sector assets and liabilities | Counterparty default contagion risks
  Substitutability Audits    | Underwritten payments and assets under custody | Missing critical market infrastructure
  Global Cross-Jurisdiction  | Cross-border claims and external liabilities  | Transnational contagion frontiers
  Complexity Identifiers     | Total notional OTC derivative volumes         | Structural resolution difficulties

Enforcing G-SIB Capital Surcharges
To mitigate the systemic risk posed by institutions considered “too big to fail,” G-SIBs are hit with mandatory Capital Surcharges. This rule forces them to hold an additional 1.0% to 3.5% of CET1 capital, depending on their systemic score, encouraging them to reduce their structural complexity.
 
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